Competition in the Australian property market intensified this week as first home buyers rushed to secure homes before prices potentially escalate further. Approximately 2,662 homes were offered at auction across the country, marking the highest volume since late May. According to data from Cotality, the auction clearance rate reached an impressive 73.8 percent, the best performance in four weeks. Next week, around 3,200 homes are scheduled for auction, although activity is expected to decline in Victoria due to the upcoming Melbourne Cup long weekend.
The clearance rate is a positive indicator that property prices will likely continue to rise throughout the spring season. Nicola Powell, head of research at Domain, noted, “The high clearance rate really shows that the depth of demand is there. We’re now well into spring and auction volumes are much higher.” The data reflects a resurgence in buyer activity, with Sydney recording 1,082 auctions, the second-highest volume for the season, and only the fourth week this year to surpass 1,000 auctions.
In Sydney, nearly 40 percent of homes are sold before the auction date, the highest proportion since 2021. Powell stated, “The consistent increase in homes selling before auction indicates strong market conditions and rising momentum.”
Melbourne Leads in Auction Activity
Melbourne hosted the highest number of auctions among Australian capitals this week, with 1,248 auctions and a clearance rate of 74.4 percent. Despite this, the figure falls short of the season’s peak clearance rate of 78.6 percent recorded in mid-September. Powell suggested that consistent price growth is attracting sellers, particularly in a market that has previously underperformed.
Louis Christopher, founder of analytics firm SQM Research, emphasized that the current clearance rates signify a robust market. Factors fueling this demand include a decrease in interest rates to 3.6 percent, which has enabled more first home buyers to enter the market with just a 5 percent deposit, avoiding lenders mortgage insurance. Christopher anticipates even higher auction volumes in Melbourne over the coming weeks, followed by a quieter period during the Melbourne Cup weekend.
Other cities also showcased strong auction activity. Brisbane led the smaller capitals with 198 homes going to auction and a clearance rate of 70.7 percent. The Australian Capital Territory saw 104 homes auctioned, achieving a clearance rate of 66 percent. Adelaide recorded 96 auctions, with 77.4 percent of homes sold. In contrast, only 14 homes were auctioned in Perth, and Tasmania saw no auctions this week.
First Home Buyers Compete for Quality Properties
A first home buyer successfully secured a two-bedroom apartment in Melbourne’s Richmond for $775,000, exceeding the reserve by $65,000. The buyer, who recently relocated from New Zealand, expressed excitement about returning to the city to be closer to family. “The proportions of all the rooms are very much like an older-style building, and the most striking feature is the beautiful view,” remarked Luke Saville of The Agency.
Saville noted that “the fear of missing out” (FOMO) has returned, as a shortage of quality properties on the market leads to swift sales of unique apartments. The most expensive auctioned property this week was a three-level, seven-bedroom home in Sydney’s Strathfield, which sold for an impressive $16.3 million. In Melbourne, a luxurious four-bedroom home in Essendon fetched $4.3 million, underscoring the high demand for premium real estate.
The current surge in auction activity reflects a revitalized market where first home buyers are seizing opportunities, aiming to secure their places before prices climb even higher.
